Buying Out a Partner in a Mortgage
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Buying Out a Partner in a Mortgage
Chirag Patel explains how buying out a partner in a mortgage works.
What happens if you split up with someone you have a mortgage with?
When you have a joint mortgage and your relationship changes through separation or divorce, you both remain financially responsible for the mortgage. You’re both ‘jointly and severally’ liable until it’s changed or paid off. It doesn’t automatically transfer to one person. Lenders still view both parties as equally liable for the loan.How do I get a mortgage to buy out a partner? Can I remortgage to buy my partner out?
A common route is to remortgage the property into your sole name, provided you meet the lender’s affordability and credit criteria. The new mortgage would ideally cover the partner’s share of the equity, essentially allowing you to buy them out. But remember, this might change your Loan to Value ratio, which can have an impact on the mortgage rate you’re offered and can potentially impact your monthly payments. Also, depending on your age, you may have to amend the term of the mortgage.How long does it take to buy a partner out of a house?
This can vary depending on how quickly you agree on valuations, secure a mortgage decision and complete the legal process. On average, I’d say it takes between six and 12 weeks, but delays may occur if there are complications in the finances, the property valuation or legal documentation.Can I use equity release to buy out my partner?
Some later life lending options such as equity release may be considered by homeowners over a certain age. However, these come with long term financial implications and should be discussed with an advisor who is qualified in equity release. You might have to think about inheritance planning. For general guidance, I would highly recommend the independent website moneyhelper.org.uk.Do I need a solicitor to buy out my partner?
A solicitor or licensed conveyancer is typically required to transfer the equity and ensure the legal ownership is updated. They’ll handle the mortgage lender’s legal requirements and help with Land Registry changes.Can you remove a partner from a joint mortgage? How do I change my joint mortgage to a single person?
You can apply to your lender for something called a transfer of equity, which removes a party from the mortgage and the title deeds. However, this depends on whether the remaining borrower can afford the mortgage alone. The lender will need to reassess affordability and creditworthiness before approving the change.Speak To an Expert
We support clients through a daunting process, looking at your circumstances and taking time to understand your priorities. We then research the market for the most appropriate options based on those needs.
What do I do if I can’t afford to buy out my partner? How much does it cost to take someone off a mortgage in the UK?
If affordability is an issue, you can explore alternatives like selling the property and dividing the proceeds, or negotiating a deferred buyout. It’s also worth seeking independent financial and legal advice to understand your options.
In terms of costs, these can include solicitor’s fees, Land Registry fees and possibly early repayment charges if you’re remortgaging. There will also be valuation costs and potentially broker fees.
These can all vary, but check with your lender, mortgage broker or legal representative for up-to-date figures.
How much will I get if my partner buys me out? How do I calculate buying someone out of a house?
This generally involves taking the property’s current market value, subtracting any outstanding mortgage balance and splitting the equity based on your agreed ownership share.
For example, if the house was worth £300,000 and you owe £200,000 on the mortgage, there’s £100,000 of equity. If your ownership split was 50-50, your partner would need to raise £50,000 to buy you out – plus legal fees.
Do I pay stamp duty if I buy out my partner?
Yes, stamp duty is payable if the amount you’re taking over exceeds the threshold – including the mortgage liability.
The rules can be complex, especially during separation and divorce. I would initially suggest clients refer to https://www.gov.uk/stamp-duty-land-tax for the latest information. It’s also really important to speak to a conveyancer or solicitor.
What are the disadvantages of buying someone out of a house?
It could increase your mortgage repayments if you’re borrowing more or extending the term. You may also need to budget for legal and valuation and broker fees. If house prices fall, you could be taking on more risk alone. It’s a big decision and one that should be weighed up carefully.
How can a mortgage broker help here? Have you got anything else to add?
A mortgage broker can really help you explore the different mortgage options, will explain the lender’s criteria and manage the remortgage or transfer process.
We also highlight how changes in borrowing will affect your Loan to Value, and consequently the mortgage rate and monthly payments. We confirm how your overall affordability works using lenders’ calculators.
Buying out a partner involves legal and financial steps. It’s not just about affording the mortgage. So it’s really advisable to speak to a mortgage professional and a solicitor to understand your rights and responsibilities.For general legal and tax guidance, you can refer to gov.uk.
Your home/property may be repossessed if you do not keep up repayments on a mortgage or other debt secured on it.
The Financial Conduct Authority does not regulate some forms of Buy to Lets
There may be a fee for mortgage advice. The precise amount will depend upon your circumstances, but we estimate it will be £499.
Chirag Patel trading as CKN Mortgages is an Appointed Representative of HL Partnership Limited which is authorised and regulated by the Financial Conduct Authority.